Saudi Aramco is looking for opportunities to expand in US over 10 years

MOSCOW (MRC) -- National oil firm Saudi Aramco is looking for opportunities to expand in the United States over the next 10 years, and wants to develop the business of its Motiva refinery in that country, chief executive Amin Nasser said on Saturday, reported Hydrocarbonprocessing.

"Motiva is something we are considering seriously to look at expanding its footprint in the United States," he told Reuters on the sidelines of a conference of US and Saudi business executives, coinciding with the visit of President Donald Trump to Riyadh.

Nasser added, "Through our investment there we are looking at the next 10 years for expansion in the US and identifying greater opportunities for growth...We are looking at both refining and petrochemicals."

Motiva was originally a joint venture between Aramco and Royal Dutch Shell but, as MRC wrote before, the partners plan to divide up the venture in the second quarter of 2017. As part of the deal, Aramco will make a USD2.2 B balancing payment to Shell.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
MRC

MOSCOW (MRC) — Mexico supports an extension of OPEC's supply cuts as a way to stabilize oil markets and bring fresh investment into the country's growing energy sector, the Mexican deputy secretary for hydrocarbons said, as per Reuters.

Aldo Flores-Quiroga said he believed members of the Organization of the Petroleum Exporting Countries should and would continue plans to coordinate oil production cuts into at least 2018. He did not say whether he preferred a six- or nine-month extension, which OPEC members are debating.

"Stable markets help provide a stable framework for investment, and that helps Mexico," said Flores-Quiroga, who assumed his post last summer.

Oil ministers from OPEC and non-member producers meet on Thursday in Vienna. Mexico, which is not in OPEC, has seen its oil industry atrophy in the past 50 years due to underinvestment and hostile regulation of foreign partners.

Constitutional changes in 2013 have slowly begun to attract capital to the second-largest Latin American economy, but low oil prices have hindered Mexico City's efforts.

ExxonMobil Corp, for example, plans to invest USD300 MM in retail filling stations through the next decade in Mexico, but will import fuel due to a lack of local crude supply and refining capacity.
MRC

MOSCOW (MRC) — Russia's Rosneft is ready to resume full oil output quickly once OPEC-led cuts end as the country's top producer has focused its own cuts on newer fields, its chief executive has said, as per Reuters.

Those cuts run until June 30, though oil ministers from OPEC and non-OPEC countries meeting in Vienna this week are expected to agree to extend a deal that has seen 22 countries reduce global output by 1.8 MMbpd since Jan. 1.

"Restrictions (under the OPEC deal) are mainly applied to greenfields," Rosneft Chief Executive Igor Sechin told reporters last week, referring to newer oil fields. "We will maintain mature fields as they are and won't cut production there," he said. "Our priority will be maintaining mature fields."

Mature fields require the pumping of gas or liquid to increase crude flows and once that is halted, it takes time to restore the pressure. That is less of an issue at new fields, where the flow rate is usually higher.

Rosneft, the world's top listed oil company by output, accounts for around 40 percent of Russia's crude production. It has targeted its cuts at its Tagul, Suzun and Vankor fields in the so-called Vankor cluster which is relatively new, among other sites, according to a source familiar with the matter who did not want to be identified.

The cuts did not touch mature units such as Yuganskneftegaz, Rosneft's largest, the source said. A company quarterly report in May showed that production fell at nearly all of Rosneft's fields, both mature and newer, compared to the fourth quarter of 2016.

However, the source said that in the case of mature fields such as Yugansk, production was affected by unusually cold weather, not deliberate steps to lower output. "As part of the (OPEC and non-OPEC) deal, Rosneft has cut its production at new projects, while the company's strategy is aimed at development of mature fields," Rosneft said in emailed comments to Reuters.

"This allows for boosting the efficiency of brownfields development, increase production at West Siberia fields and to raise greenfields' output in the shortest time once the pricing environment improves."

According to energy ministry data, which excludes some Rosneft units, the company's average output in April was down by 116,000 bpd compared to October, the reference month for the deal.

Russia promised a total cut of 300,000 bpd.

Rosneft, which produced an average of 4.62 MMbpd in January-March, saw output in the first quarter fall by 12.5 MMbbl or 2.9% from the previous three months.
MRC

MOSCOW (MRC) -- Russia's output of chemical products increased by 6.9% in the first four months of the year, as per Rosstat's data.

The largest increase in output occurred for the benzene and caustic soda, as per the Federal State Statistics Service. According to the Federal Service of State Statistics, last month's production of basic chemicals grew by 5.2% from April 2016. Total production of key chemicals in the country grew by 6.9% in the stated period. Benzene and caustic soda accounted for the greatest increase in the output.

April production of ethylene was 234,000 tonnes compared with 268,000 tonnes in March on the back of scheduled maintenance works at Kazanorgsintez and Stavrolen. Overall, over 1.0 m tonnes of this olefin were manufactured in the first four month of 2017, up by 8.4% year on year.

Last month's production of benzene dropped to 105,000 tonnes from 131,000 tonnes in March on the back of shutdown at two productions. Overall output of this product exceeded 483,000 tonnes over the stated period, up by 12.5%year on year. The increase in production was ensured by Angarsk Polymer Plant.

April production of xylenes was 43,600 tonnes, compared to 45,400 tonnes a month earlier. January-April output of xylenes was 190,200 tonnes, down by 4.6% year on year.

April production of sodium hydroxide (caustic soda) was 98,900 tonnes (100% of the basic substance), down 11.4% year on year. Overall output of caustic soda grew to 406,800 tonnes in January-March 2017, up by 9.6% year on year. In February 2016, due to force majeure for ethylene supply, SayanskKhimplast was forced to shut down its caustic soda production, the outage continued until July.

April production of mineral fertilizers was 1.757 mln tonnes (in terms of 100% nutrients), down 4.9% from the March level. Russian plants produced over 7.125 mln tonnes of fertilizers in the first four months of 2017, up by 7.4% year on year.

Production of all types of fertilizers increased, with potash fertilizers, the output of which grew by 14%, accounted for the greatest increase.
MRC

Last month's SPVC imports to Ukraine grew to 7,100 tonnes from 6,700 tonnes in March. Local companies partially offset a shortage of resin from European producers by higher shipments from the US. Overall SPVC imports were about 28,000 tonnes in January-April 2017, compared to 39,900 tonnes a year earlier. High imports at the beginning of last year was due to low export prices in the US, whereas, this year there are export restrictions in all foreign markets, especially in Europe.

The structure of PVC imports into Ukraine by countries looked the following way over the stated period.

Last month's SPVC imports from the United States rose to 3,000 tonnes from 800 tonnes in March, local companies were forced to increase their purchasing of North American resin because of restrictions of European producers. Imports of North American resin totalled 6,800 tonnes in the first four months of 2017 versus 25,500 tonnes a year earlier. At the end of last year, many Ukrainian companies did not form additional stocks of material because of high export prices compared to European prices.

April imports of European PVC into the Ukrainian market dropped to 3,100 tonnes from 3,700 tonnes a month earlier. Shipments of resin from Hungary and Poland slumped. Overall imports of European PVC to Ukraine totalled 15,400 tonnes in the first four months of the year, compared to 11,000 tonnes a year earlier.

Last month's imports of Russian SPVC fell to 761 tonnes from 2,300 tonnes in March. Lower shipments were caused by the ban on imports of material of two producers: RusVinyl and Kaustik (Volgograd). Shipments of Russian resin were 5,800 tonnes in the first four months of 2017, compared to 3,100 tonnes a year earlier.

MRC